Control of the Weather (Discussion II)

In my last post entitled "Control of the Weather (Discussion)" that was posted and distributed on March 29, I set forth some comments made by Eric Offner Esq. of New Hyde Park, New York. To access those comments double-click on the title of the post above.

At the end of that post I promised that: “Next time I want to tackle a very important and complicated subject, i.e. the role that race plays in American life and politics. It will be entitled: “It’s All About Race.” But since the discussion emanating from the comments contained in that post continued, I want to share them with you.

In response to the comments I made as set forth in that last post, Eric Offner wrote:

Thank you. Please discuss the present Supreme Court hearings. It seems that we will get a 5 to 4 decision, as was the case in the decision that made Bush President. We can throw out the commerce clause, and cite pre new deal case law. By the way I did not realize that the price of gas issue is a left/right issue, but I do not intend to pursue this. Your scholarly articles are very much appreciated.

To which I replied:

I am sorry to say that the Supreme Court hearings on the Health Insurance Reform Act is not a subject I plan to address in forthcoming commentary. There are only so many subjects I can deal with, and as I have indicated, I am anxious to deal with the issue of race in our society and politics.  

I will say, however, that 5/4 against is not a foregone conclusion. Kennedy has been and continues to be the linchpin, so that we do not have a court of 9, but essentially a court of one. Kennedy decides. However, that does not mean a 5/4 if it is upheld. Some commentators have speculated that if Kennedy goes with the liberal 4, Roberts will join the majority for upholding the law, in order to appoint himself as the one who writes the majority opinion. That would make it 6/3 but assure a narrow holding, with concurring opinions.        

As for the Commerce clause - yes it has been under attack for some time. They are pushing for a pre-New Deal interpretation. Only Kennedy can stop it and if Obama loses, the Right wing Court majority will go to 7/3, when Ginsburg retires or dies, and Kennedy will no longer be the swing vote. It will lead to total Right Wing domination.    

As for the price of gas being a Left/Right issue, it is not. Rather it is a partisan issue. There is a difference. When Bush was President and the price of gas reached levels comparable to the price now, Democrats, including Obama, attacked Bush. I don't remember the details but my guess is that Bush was no more responsible than Obama is now.

But then, after listening to the NewsHour on PBS on Friday March 30, I felt further comments were called for. I wrote:

Since saying "that the Supreme Court hearings on the Health Insurance Reform Act is not a subject I plan to address" I have seen additional facts, particularly on the NewsHour on PBS on Friday that made me feel I had to comment. So here goes:              

In listening to the NewsHour on PBS yesterday I saw a clip of Romney on the campaign trail (See here at two minutes into the video) where he says: Obama Care “will directly control almost half the US economy.” There is a tendency to exaggerate on the campaign trail, but this is beyond all reason. The absurdity is evident when we consider the government will not control anything. It will regulate the health insurance industry. Regulate not control (Medicare or a single payer might be considered as controlling but this does not control, it regulates) and the whole Health Care Industry of which insurance is a small part, is 16% of our economy. See here.              

He then goes on to say, “if I am President I will repeal it.” Doesn’t he ever read the Constitution? The President can’t repeal an act passed by Congress. Only Congress can. 

At 55 minutes 22 seconds into the video we get a discussion between Brooks (representing the Right viewpoint and Shields representing the Left, actually they are both rather moderate) and they both are embarrassed to note that some of the justices during the hearing are actually expressing Tea Party talking points.  

It is difficult for me to understand why there is even a question as to the Constitutionality of the Law. It is no different from any other tax levied, i.e. you pay taxes on your income unless you choose to give money to charity, in which case you don’t have to pay a tax on that portion. Social Security taxes don’t benefit you directly and not immediately. They benefit another generation, i.e. those over 67.              

Talking about forcing people to buy broccoli is and was intended to be facetious. But of course Congress can tax people who don’t eat broccoli, if it is shown that there is a reasonable connection between that requirement and the regulation of Commerce, but that can only be decided when that issues is before the court. Even if such a regulation were ridiculous it would not therefore make it unconstitutional. Some of the justices are behaving like clowns.              

If the court, after the Gore case and the United Case goes down the same partisan ideological route it will discredit its legitimacy. Years ago, (at the moment I can’t pinpoint when it changed) one could not tell how a justice would vote by whether a Republican or a Democrat appointed the Justice. Now that is controlling.              

In Roe v. Wade a decision that was 7 to 2 (not 5 to 4) the majority consisted of Harry Blackmun, William J. Brennan, Chief Justice Warren Burger, William O. Douglas, Thurgood Marshall, Lewis Powell and Potter Stewart. (It was not the Warren Court, and by the way Earl Warren was appointed by Eisenhower, a Republican.)

Blackmun was appointed by Nixon (Republican); Brennan by Eisenhower (Republican); Burger by Nixon (Republican); Douglas by Roosevelt (Democrat); Marshall by Johnson (Democrat); Powell by Nixon (Republican); Stewart by Eisenhower (Republican). Of the 7 justices in the majority, 5 were appointed by Republican Presidents. Yet this has now become a partisan issue.              

When we know how a justice will rule by which party appointed him/her, then it is an extension of the party, and no longer a judicial forum.                       

I don't know what the answer is, but we cannot indefinitely allow a partisan body to have the power to overrule an elected legislature. Only a judicial non-partisan body can be allowed to do that.

And Irving Lesnick Esq. of Boca Ratan, Florida picked up on the issue of eliminating speculation in oil and other commodities, writing:

Your comments are interesting, as always. While I generally agree with them, I will mention a disagreement, or at least a query, since you prefer disagreement, with your statement that outlawing speculation would require banning all commodities trading. It seems to me that the situation here is somewhat like that which prevailed in the life insurance business in the 1700s or so in England. There people were buying what we now call term life insurance on the lives of public figures.  Reportedly, it became a bit of a bubble, and both because it was viewed as morally objectionable as gambling but probably more importantly because some of the public figures began worrying that allowing the wrong people to get into a position to profit from their speedy death, their death might become more speedy than it would otherwise be. The response was the imposition, I think by legislation, of a requirement of insurable interest in the purchase of insurance, which limits insurance purchases to situations where the purchaser would suffer a loss from the occurrence of the insured against event. There are non-speculative reasons for buying and selling commodity futures - a manufacturer who wants to be protected against a rise in the cost of raw materials, an airline who wants to be protected against too much of an increase in fuel prices or and farmer who wants to be protected against a fall in the price of his or her future crop. Requiring participants in futures markets to have these kinds of interest would bar speculation, without banning commodity trading. How to structure such a requirement is, of course, another question.

To which I responded:

Your analysis is worthy of one who was an editor of the Yale Law Journal.                 

You are absolutely correct that there is a way to outlaw speculation without banning all commodity trading, and the insurance industry, (your area of expertise) is clearly a perfect example. But that then brings us to the question of whether it is desirable to stop speculation. I would argue that it is not desirable. If you placed the kind of restrictions on the commodities markets as you suggest, the market would shrink to a degree where "legitimate traders" would have a hard time finding buyers when they were ready to liquidate their positions. Furthermore not all commodity traders can be defined in the futures market as your focus suggests. What about commodities like gold and silver? Traders in gold buy the metal to hedge against inflation. How do you limit this? Or do you limit the market to jewelers.

The problem becomes similar to the stock market, where one could argue that only legitimate investments in a start up business should be allowed, but without a secondary market, the primary market collapses. That is also true in commodities. When you get rid of the "speculators" you are getting rid of the secondary market.                 

Please advise if I am missing something.

And then added:

This reminds me of Revolutionary times. Since the Continental Congress had no taxing power and the states were very poor providers of money to fight the war, the Congress issued promissory notes that went unpaid and because it appeared they would never be paid, they became worthless. A secondary market of speculators arose ready to buy the notes at huge discounts, thus giving them some limited value to the relief of the primary holders. Jefferson argued that the notes should not be paid because that would unjustly enrich the speculators. Hamilton in turn argued that what was at stake was the full faith and credit of the US. Washington sided with Hamilton, the speculators were paid, and the Full Faith and Credit of the US was never in doubt thereafter. [Until the Tea Party (to all intents and purposes, the Republican Party) decided to threaten to prevent the US from paying its debts. For the first time since then, the US full faith and Credit has now been put in doubt.]  The bracketed portion is a bit of a digression, but the point is a secondary market, which usually consists of speculators, is vital to a functioning market.

Comments, questions, or corrections, are welcome and will be responded to and distributed with attribution, unless the writer requests that he/she not be identified.